Amazon Acquires Online Shoe Retailer Zappos.com

The acquisition sees Amazon pay Zappos $847 million total ($807 M stock and $40 M cash and restricted stock) and there will be no changes to the Zappos’ management team.

Details of the acquisition, FAQ’s and their motivation for the deal are in a post from Tony Hsieh (CEO of Zappos.com) on the company blog.

The key points he writes are as follows:

“This morning, our board approved and we signed what’s known as a “definitive agreement”, in which all of the existing shareholders and investors of Zappos (there are over 100) will be exchanging their Zappos stock for Amazon stock. Once the exchange is done, Amazon will become the only shareholder of Zappos stock.”

“We are excited about doing this for 3 main reasons: 1) We think that there is a huge opportunity for us to really accelerate the growth of the Zappos brand and culture, and we believe that Amazon is the best partner to help us get there faster. 2) Amazon supports us in continuing to grow our vision as an independent entity, under the Zappos brand and with our unique culture. 3) We want to align ourselves with a shareholder and partner that thinks really long term (like we do at Zappos), as well as do what’s in the best interest of our existing shareholders and investors.”

“we plan to continue to run Zappos as an independent entity. In legal terminology, Zappos will be a “wholly-owned subsidiary” of Amazon. Your job is just as secure as it was a month ago.”

“We realized that Amazon’s resources, technology, and operational experience had the potential to greatly accelerate our growth so that we could grow the Zappos brand and culture even faster. On the flip side, through the process Amazon realized that it really was the case that our culture is the platform that enables us to deliver the Zappos experience to our customers. Jeff Bezos (CEO of Amazon) made it clear that he had a great deal of respect for our culture and that Amazon would look to protect it.”